It doesn’t matter if it happens within the boxing ring, or in movies, or in the world of business – everyone loves a good comeback story. And that’s just what’s playing out with Electronics for Imaging (EFI), the Silicon Valley-based company that saw its fortunes decline in 2017. Electronics for Imaging’s stock plummeted to as much as 33.2% in the third quarter of last year. Meanwhile, revenue reached only $247 million, $11 million shy of analyst expectations of $258 million. In response, then-CEO Guy Gecht said the company will be “reallocating budget and talent toward our largest opportunities, in textile and packaging, along with making organizational changes and adding senior positions to improve focus and execution.”
That apparently did the trick. In June 2018, EFI hit a record second-quarter revenue of $261.1 million, a 6% increase from the second quarter 2017 revenue. Then on October 4, 2018, Gecht stepped down as CEO, allowing William Muir – formerly of Jabil – to take the reins.
The world loves a good comeback story, and like Rocky Balboa training to finally beat Clubber Lang, Electronics for Imaging is back on track.
Analog Printing vs. Digital Printing
Electronics for Imaging’s turnaround has taken place in an industry whose growth hinges on innovation. Specifically, the innovations that arise in the battle between analog printing vs. digital printing.
As the more traditional method, analog printing generally requires the creation of a master image or template. By nature, it’s much less flexible, more labor intensive, and leaves more of a waste footprint.
Digital, on the other hand, allows for the printing to go directly from the computer to the target. Changes can be made instantaneously, thereby giving it more flexibility. In addition, cutting out much of the process needed for analog printing makes digital “greener”.
For this reason, the digital printing space is expected to flourish. And since EFI’s bread and butter is digital printing…
A Change in Management
The digital printing industry has companies like Durst, Esko, and Global Imaging all jockeying for dominance. Since their position was slipping, Electronics for Imaging needed a change in management, and Muir was the best fit.
With a comprehensive engineering and manufacturing background, Muir had over two decades of experience taking branded products to market. One such product was Jabil’s Blue Sky Innovation Center. His successes at Jabil saw Muir assume roles at COO, CEO, and president of Jabil Asia. Jabil’s growth within the span of four years speaks volumes as to Muir’s performance.
Gecht supported his successor, saying, “Bill is going to take EFI to the next level. At Jabil, his experience and track record included scaling multi-billion dollar businesses, driving execution and setting the firm’s strategic direction.”
Despite the change in management, Gecht has stayed on as a member of the board of directors and is an adviser to the CEO.
EFI – New Six Drivers of Growth
Since Q2 2017, Electronics for Imaging identified three key areas for the company. The first was to tap on the immense opportunity for digital, on-demand production in imaging industries. Second, EFI would double down on its largest growth opportunity areas. Third, EFI would address its mistakes, and make crucial changes to return to record-making performance.
Electronics for Imaging knew that there are six drivers of digital printing growth. They are:
- Online ordering
- A large number of unique jobs
- Manufacturing on demand
- Tight operation and business management
- Distributed manufacturing.
It is within these specific areas where they aimed to provide breakthroughs. The company also saw long-term opportunities in corrugated, flexible packaging, rigid packaging, and folding cartons.
Electronics for Imaging Five-Point Strategy
As for building materials, EFI knew it had a captured market for ceramic tiles, wood panels, and decorative laminates.
Experts also indicated that, due to textile printing, the digital printing market would soar from $22.18 billion in 2017 to $28.85 billion by 2023. To achieve organic growth, EFI had a five-point growth strategy.
- Expand in packaging
- Foster textile ecosystem for brands and production
- Improve solution footprint growth in customer base
- Differentiate services and business consulting
- Expand print activity outside North America
EFI also aimed to achieve growth and success through strategic mergers and acquisitions.
Electronics for Imaging and Its Vivid Future
EFI has a lot to look forward to.
The ink market for digital printing will have the biggest market share between 2017 and 2023. Consequently, to address the growing demand, EFI debuted eight new products for advanced signage and industrial textile production at the SGIA Printing Expo in Las Vegas on October 18, 2018. This includes entry-level LED printers, a high-end portfolio of automated smart printers, a new version of its printing software Fiery, and EFI Regianni TERRA, a greener and more sustainable printing technology.
“As I’ve started to learn the organization, our customers and our business and I have a great deal more to learn, it is becoming clear to me that for EFI to be at its very best, we must leverage the many capabilities we possess simultaneously and more seamlessly for our customers.” – Muir
While Electronics for Imaging may have experienced a dip in 2017, its innovations will help it continue to shape the future of digital printing. The company isn’t running out of opportunities anytime soon. And as the industry thrives, so too will EFI.
Now that’s a comeback story!!!!